I'm a literature geek fascinated by the transformative role that technology plays in business. I started covering cleantech in 2007, with a particular focus on practical solutions that help companies, cities and communities get closer to their sustainability goals.As a Senior Writer with GreenBiz.com, I chronicle how tech helps reduce greenhouse gas emissions, improve energy efficiency, conserve water and shrink waste. I started my journalism life as a business writer with United Press International in New York, and spent 17 years at tech trade magazine, CRN, providing occasional commentary for CNN and CNBC. Along the way, I've been published in Entrepreneur, The International Herald Tribune and The New York Times. Long ago, I earned a B.A. in English literature from McGill University in Montreal, Quebec. Follow me on Twitter @GreenTechLady. Email heather@heatherclancy.com with compelling green business success stories or to debate the latest Jasper Fforde novel.

The author is a Forbes contributor. The opinions expressed are those of the writer.

Shortages, Leaks Lead More Water Utilities To Consider Smart Meters

This week, after literally two years of estimating my water bill through season averages, my local water utility forced me into the smart era by literally tripling its guesstimate about my consumption and (by association) the amount it expects me to pay.

That number got my attention and made me realize my meter was way out of date (14 years old, when the lifetime is supposed to be 10 years, apparently). So, as of about two hours ago, my home sports a brand-new radio-controlled one that field technicians will be able to read from outside the house. I’m actually a little embarrassed I didn’t think about this sooner.

The initial brouhaha over smart meters was largely focused on managing electricity, but the issue of what I think of as “water efficiency” is coming into its own—something that I believe within the next five years will become just as much of a conversation within businesses as energy efficiency programs.

The big driver is heightened interest in water scarcity, an issue highlighted with special interest by the United Nations every year on World Water Day (which happens to be this weekend). The figure that gets thrown around is this one: between 2010 and 2050, 3 billion MORE people than today will need access to urban drinking water and wastewater management services. Balance that with the fact that 250 million and 500 million square meters of water go to waste in cities every year, and there’s an obvious supply and demand issue.

Water utilities around the world are moving to modernize water infrastructure (or to put some in place where none excited before). The reasons are simple and not entirely altruistic: the need to better manage supply, find waste points more quickly, and get a better handle on how to bill customers more accurately.

New projections from Navigant Research peg the installed base of advanced and smart water meters at 153 million worldwide by 2022. Put another way, unit shipments for advanced and smart meters along with separate communications modules will grow from 7.6 million for 2013 to 17.3 million annually by 2022, which represents a company annual growth rate of 9.6%. Advanced meter infrastructure (AMI) meter shipments will grow even faster: from about 1.2 million to 6.8 million over that time period. And overall annual revenue will grow from $885 million in 2013 to $2 billion, Navigant predicts.

“Smart meters are the spearhead for many, but not all smart water network deployments,” writes the research firm in its report. “Other forms of monitoring – including leak detection, pressure management and water quality monitoring – are also becoming an integrated part of the real-time data network for water operations.”

From an investor standpoint, that attention is inspiring startups like WaterSmart Software, a small company that works with municipal utilities to help them understand their meter data and manage customer conservation programs. The role they play in managing water consumption is similar to the one played by companies like Opower in home energy management.

This may sound “boring” but it has intrigued serial entrepreneur Gary Kremen (founder of Match.com), who is one of WaterSmart’s angels and board members. “You can always produce more power, it might not be good for the environment, but water is one thing that it is really challenging to make more of, especially in the west. Even in [places] where it is more plentiful, getting access to the infrastructure is really hard,” Kremen said, when I asked him about “underappreciated” cleantech investment opportunities.

His comments make ESCO Technologies decision to divest smart water meter company, Aclara Technologies, all the more intriguing—and it hints at the consolidation that is likely to occur over the next few years. Under the deal, Aclara will become part of Sun Capital Partners, which is paying $150 million. The company already works with more than 600 utility customers (not just water but also natural gas and electricity), and it is behind big water AMI installations in New York City, Boston, Toronto, San Francisco, and Washington, D.C.

“Aclara is a strong organization that is well-suited to capitalize on future opportunities as a standalone business,” said Marc Leder, co-chief executive officer at Sun Capital, in a statement about the deal.

Most of the big water management and services companies are circling this market opportunity, but two innovative, early-stage companies to watch in the burgeoning water efficiency space are i20 Water from the United Kingdom, which has signed high-profile utility customers across Europe, and in Malaysia and South Africa; and Israel’s TaKaDu, which has gained traction in Europe, Australia, Latin America and the Middle East, and last October attracted an equity investment from 3M New Ventures.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.